Business and Law

Essay by irbazkhanumtCollege, Undergraduate April 2012

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Business Law and Product Liability

Product liability law has evolved from two bodies of law: contracts and torts. Contract law provides the rules for ascertaining the legal responsibilities of parties to formal agreements, including contracts for the sale of goods. Tort law provides the rules for determining whether a person has acted negligently towards someone to whom he owes a duty of case, independent of any contract, and whether that negligence caused injury or property damage to others.

Personal injury law includes the recovery of compensation in relation to injuries and medical conditions in a broad range of compensable situations. Personal injury law is divided, broadly speaking, into common law and statutory schemes, such as Workers Compensation and Victims Compensation. Manufacturers of defective products could be liable in contract despite the absence of a formal contract or a showing of negligence.

Today, it is common practice for injured persons to rely upon all three theories -- strict liability, implied contract warranty, and negligence resulting in a tort when they sue. Raising all three legal theories maximizes the potential for injured persons to recover punitive damages awarded because a manufacturer grossly abused his duty to provide a safe product. It also increases the chances of overcoming manufacturer defenses because some defenses apply only to one legal theory and not to another theory.

The absolute facts are that product manufacturers, from cigarettes to firearms are being held accountable for the relative safety of their products. Attorneys general from all but four American states unveiled a $206 billion deal with tobacco companies to settle all lawsuits against them (When lawsuits make policy, 2003). The impetus in these consumer-oriented lawsuits is to compel manufacturers to do their utmost...